Well and pipeline licensees are assessed an Oil and Gas Regulatory Cost Recover Levy (the 'administrative levy' – formerly known as the well levy) each year to offset some of the costs incurred by the Government of Saskatchewan for the ongoing regulation of the oil and gas industry.
The administrative levy is a single annual payment to Saskatchewan's General Revenue Fund. Invoices are delivered to industry through the Integrated Resource Information System (IRIS) for well holders and a paper invoice will be mailed to those companies with licensed pipeline holdings.
Administrative Levy Formula
The administrative levy is calculated using a formula set out in The Oil and Gas Conservation Regulations, 2017. The amount of the annual payment is tied to the number of well in the various well categories (based on the volume of oil and gas produced from a well in the previous calendar year) and the length of a pipelines licensed in the previous calendar year for various categories of pipelines. An annual adjustment factor established by an Order in Council adjusts each year's payment to account for changes in the revenue requirements of the Government of Saskatchewan for the provision of regulatory services. Levy invoices are typically issued in the second fiscal quarter of the year, after approval of the provincial budget.
A summary of the previous annual levy calculation as well as the Order in Council that gives regulatory effect to the annual adjustment factor for each year is as follows:
Well Levy Calculation
Administrative Levy Spending
The administrative levy helps pay for services tied to the regulation of the oil and gas industry, including:
- Licensing of wells, facilities and pipelines
- Review of seismic plans and permitting
- Inspection of well sites, pipelines and related facilities
- Reporting of oil and gas production
- Abandonment of wells and facilities
- Environmental reviews of proposed wells and facilities
- Review and approval of Crown surface lease applications
For more information, see the previous levy annual reports produced for each annual period.